Bangladesh is an important market for Standard Chartered

Sunil-Kaushal

Standard Chartered Bank has been able to sail through difficult times in different markets across the globe with distinctive features as it has continued to play its dual role of an international bank and local bank successfully.

“In many ways, we are more local than any international bank, and we are more international than any local bank. That is where our real strength lies,??? said Sunil Kaushal, regional chief executive officer of the UK-based bank for South Asia, which includes markets such as India, Bangladesh, Sri Lanka and Nepal.

“If you want to pursue an international business, you will normally come to a bank like us, because we have got the network, experience and clients. At the same time, we have the local expertise. This is a very unique proposition.???
Standard Chartered is the oldest and largest foreign bank in Bangladesh and has been operating in the country for more than 100 years. It has 17 branches in major cities.

“It (Bangladesh) is one of our fastest growing markets, and clearly a very important market, not only for the present but also for the future,??? he told The Daily Star during an interview in Dhaka recently.

He said the bank has been a consistent performer in the country with a strong double digit growth in the last five years. “If you look at the banking sector, the double digit growth for any bank is a very good story.???

“It is a classic emerging market. It has large population. In terms of growth prospect, there is a lot of locally generated demand. There is good positioning on the export side. There is a lot of requirement for investment that creates opportunities for the banks.???

The banker visited Dhaka at a time when the country has been witnessing serious political unrest for more than a year. Political uncertainty has hit the economy very hard, with the banking sector’s profitability on the declining trend following years of higher profits.

Elections and their anticipated results sometimes might defer or slow down investments, as investors prefer to avoid risks. But Kaushal said emerging markets are quite different when it comes to that.

“I have met a bunch of clients in Dhaka, and I asked them the same question. Everybody said their plans are very much on track in terms of investment and they continue to invest in.???

When asked whether the bank is nervous about the political developments, he answered negatively.
“We are not nervous. We have been in this country for 105 years. We have seen many ups and downs, and elections are something you have got to expect in a democratic country.???

Kaushal said his bank does not slow down business whenever elections come in the country. “We have not done that in the past. We do what our customers and clients want us to do. Currently, our clients are continuing to invest and grow.???
He said his bank is also optimistic about recovering global economic climate.

“The simple reason is that for the first time in about seven years we have seen all major markets grew at the same time. The last time it happened in 2006-07.???

“It is a good piece of news for businesses in general, particularly for the export-oriented industries. There will be more demand from the developed world. I think we are going to see the same in the case of Bangladesh.???

He also sees the recent twin disasters — the Tazreen Fashions fire and the Rana Plaza building collapse — in the garment sector rather positively.
“I think it is a process of evolution; as the industry matures, there will be a need for raising the standards further. It is all about raising the standards. It is about doing the right thing in many ways in terms of health and safety.???
The SCB senior official said Bangladesh would continue to remain a top market for the bank.

“It is one of the top 11 markets for the bank in terms of growth rate globally.???
The UK-based bank is growing at double digits when other local banks are suffering from falling profits this year.

“Our focus has been and will continue to be on the basics of banking. That gave us very good results even during the crisis. In 2008-09 and thereafter, most banks either slowed down or curtailed their business and reduced the scope of business they were doing.???
“We have remained open for businesses. In fact, during those years, we had recorded top line growth and profits.???

Like all other banks in the country, SCB also faces criticism about the level of customer services.
But Kaushal said: “We take complaints very, very seriously. We are in a service industry. Complaints are feedback for us to improve our services.???

He ascribes the higher spread — the difference between the deposit rates and the lending rates — to the bank’s ability to collect funds at the most efficient rates.

According to Kaushal, 2014 looks fairly positive in terms of global scenario.
“The rise in demand will have immediate impact on all export-oriented countries such as Bangladesh, Taiwan, Korea and Malaysia.???
The bank plans to hold its third investment summit exclusively on Bangladesh to showcase what the country can offer, following two such events in Singapore late last year and in London this year.

“The summit was well-attended. There are a lot of enquiries about the business potential in Bangladesh. We hope we can do it again next year,??? he said.
“I was in Japan a few weeks ago. They showed a lot of interest about investment in Bangladesh. We keep saying that this is a very attractive market.???
“I am saying this not only on the banking sector perspective, but also about the whole business perspective.???